B2B Wholesale Marketplace: Conventional vs Digital Business Practice

The supply chain industry is commonly defined into two parts. First, the entities involved, namely, the manufacturers, distributors/ wholesalers, and retailers; secondly, the movement of a commodity either goods or services across the supply chain before reaching the end consumer.

Note that these entities are self-contained and operate independently. They work together under specific agreements of transaction where otherwise, none of these entities has control over the other member.

In a conventional supply chain, the business practice would almost always operate based on a push-based strategy where manufacturers produce goods and push it to the supply chain to reach the distributors/wholesalers first and then, the retailers.

Over the years, this conventional practice has been recognized to have some operational disadvantages such as the communication gap between members in terms of supply and demand, which could lead to either shortage or surplus of produced end products.

The advent of technology has brought in a number of digital solutions working at every layer of the supply chain to help overcome these conventional issues. However, the adoption of digital solution in supply chain industry has yet to become a nationwide practice.

This article will reveal in greater depth on the differences between conventional and digital business practice especially from the perspective of a retailer.

1. Backorder and Out-of-Stock

Conventional Practice

Generally, a backorder occurs when an order of goods could not be fulfilled at the current time due to the lack of available supply. The goods might not be held in immediate inventory but are still in production.

The nature of backorder and the number of goods on backorder will also affect the lead time before a buyer i.e. retailer can eventually receive the ordered goods.

When the goods are out of stock more often than not, it implies that there might be miscalculation in terms of supply-demand forecast from your supplier. It is a well-known fact that the retail industry is highly competitive, hence, time is of the essence.

There is always a chance that the end consumer might be able to find the same product from other retailers who have it on the spot while you wait for your stock. This will eventually leads to a revenue loss on your part.

Digital Practice

Online platforms like Dropee promotes digitization in transforming the way you order and procure from manufacturer/supplier. The platform serves as a marketplace for you to stock up products that your business requires.

In simpler words, Dropee’s B2B Wholesale Marketplace opens up a new alternative for you to source for products from other suppliers that would have the stock in hand and are able to supply to you faster.

By merging e-commerce into conventional procurement practice, retailers can now browse for products, compare prices, and place order without ever having to talk directly to the suppliers.

Dropee will handle it for you to save you the hassle of confirming your purchase order again and again.

Not only will this save you from having to deal with backorder or out of stock issues, it will also cut your lead time tremendously since every order will be processed immediately after every completed transaction.

If you can’t wait for 3-5 days delivery, you can always opt for self-pickup option during check out. Dropee’s B2B Wholesale Marketplace offers delivery methods as follow;

  • Supplier’s delivery
  • Self-pickup
  • Dropee’s third party logistic partner  

2. Supplier Relationship Management

Conventional Practice

Given the local context, most retailers procure and source from their long-term suppliers with business relation being established from the generation before them. The supplier-retailer relationship is then predominantly dependent on pre-formed connection and referral.

However, having secured suppliers through this method may not necessarily guarantees you the most efficient procurement experience. Issues such as on-time stock delivery and stock availability would still surface despite having ordered from a trusted supplier.

On top of that, following to the conventional business practice in terms of supplier management, it would mean that you will have to follow a number of different order fulfillment procedures and different contract agreements especially when you engage with multiple suppliers at a time.

Retailers would then have to constantly communicate with suppliers in order to confirm purchase order, schedule delivery, receive invoice, etc. In turn, this can be overwhelming and eventually making it difficult for you to streamline your business operation.

Digital Practice

Dropee suggests a solution to conventional supplier management practice by gathering suppliers on a single platform that is designed to provide the same procuring process for all.

It simplifies the way you procure where you can simply browse according to product or supplier, add products to cart, complete payment, and choose you delivery method.

No further communication is required as you can always check from your own account dashboard whenever you need to monitor the order fulfillment status or to track order delivery.

Dropee’s online B2B Wholesale Marketplace also allows you to source from multiple suppliers easily by enabling you to conduct product price comparison in a transparent manner. This feature helps you to choose the best product margin that will be more cost efficient to you.

It is also a great alternative for new retailers who have yet to establish any long-term retailer-supplier relationship to grow their supplier base with guaranteed transaction transparency and reliability.

3. Procurement Documentation

Conventional Practice

Pen and paper documentation may sound outdated in this age, but it remained as the main method of issuing a purchase order, generating invoice, delivery note, product list, etc. among a majority number of existing suppliers.

Due to manual documentation that translates into scores of paperwork, retrieving documents and inventory tracking for instance, would definitely cost you a longer processing time, and not to mention how human error is common, especially when order volume is high.

The reliance on pen and paper documentation also limits your access to these information within the storage boundaries of your office or store.

Digital Practice

Auto-generated documentation and cloud storage are some of the digital developments to solve issues pertaining to pen and paper documentation, among other management softwares available out there.

Dropee provides exactly these solutions where every purchase order on our platform will be issued with auto-generated payment acknowledgement, invoice, and delivery notes. These documents would be sent straight away to your registered email for your safekeeping and reference.

You are able to have unlimited access to these documents, thanks to our cloud storage feature. Now you can monitor, track, and review all your purchases and activities in one comprehensive dashboard anytime and anywhere when you procure from Dropee’s B2B Wholesale Marketplace.

Make The Digital Shift With Dropee Today!

Dropee is a one-stop B2B eProcurement platform that allows businesses to get connected in order to buy and sell in bulk at wholesale prices.

The adoption of digital development into conventional retail business practice may not necessarily be a complex and complicated process that will throw your business cost of the roof.

By simply merging eCommerce technology into your procurement practice, you are already a step closer to better work efficiency and improved productivity. Sign up with Dropee today and experience how digitization can help you to scale up your business.

Feel free to contact us at 03-5650 5184 or click HERE to WhatsApp us for further assistance and inquiries.

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